The Office of General Counsel issued the following informal opinion on November 25, 2002, representing the position of the New York State Insurance Department.
Re: Financial Security requirements Combined Single Limits Policy
Does a combined single limits of liability policy of $65,000 satisfy New York financial security requirements for an accident in which one person was injured?
A motor vehicle policy that has combined single limits of liability of $65,000 satisfies the financial security requirements for an accident in which one person was injured.
An individual was injured in an automobile accident. There were no other losses. The insurer of the vehicle that struck this individual tendered $65,000, the entire policy limits of the insureds combined single limit policy. You asked whether this meets New York financial security requirements.
Chapter 305 of the Laws of 1995 amended N.Y. Veh. & Traf. Law § 311 (McKinney 1996) to increase the required minimum limits of liability for motor vehicle insurance coverages. The new requirements became effective on January 1, 1996 and apply to all accidents occurring after that date. The required minimum coverage for liability for injury to one person in a motor vehicle accident increased from $10,000 to $25,000 and, subject to said limit for any one person, the required minimum liability coverage for liability for injury to two or more persons increased from $20,000 to $50,000. The minimum liability coverage for property damage increased from $5,000 to $10,000. Minimum bodily injury liability limits remained at $50,000 when one death occurs and, subject to said limit for any one person, $100,000 for death of two or more persons. These limits are also contained in N.Y. Comp. Codes R. & Regs. tit. 11, § 60-1.1 (2002) (Reg. 35-A).
This Department issued Circular Letter No. 15 (1995) advising insurers of these changes. Paragraph 3 of that Circular Letter addressed combined single limits of liability for injuries from a motor vehicle accident. It states:
For those insurers selling policies containing combined single limits of liability (CSL), appropriate rates should be filed with the Department for minimum CSL of $60,000 for liability and $50,000 for SUM to ensure that limits of at least $25,000 are available for liability for injury to one person in a motor vehicle accident; at least $50,000 for liability for injury to two or more persons and at least $10,000 is available for liability for property damage.
In accordance with the above, a combined single limits policy with a limit of $65,000 is permissible. In your case, this amount more than covers the New York Vehicle and Traffic Law minimum financial security requirements,
which only require that $25,000 be available for an accident in which one person sustains injury. However, if there had also been a death of another person, the insurer would have $50,000 in additional exposure, which would result in the potential liability exceeding the policys $65,000 limit of liability. In such a case, as was stated in Office of General Counsel Opinion Letter dated October 16, 1992 from Senior Attorney Lawrence Fuchsberg, the insurer would be required to provide the additional coverage. A combined single limits policy must have an endorsement that provides that where the accident results in death, the insurer will respond in the amount required by New Yorks financial security requirements.
For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.